Support: How New Jersey Treats Underemployment

In some circumstances, a party who is obligated to pay alimony and/or child support may change their employment, earn substantially less than before, and seek to have either obligation decreased on the basis of decreased income.

The New Jersey Courts will not overlook this event; it is not a matter of happenstance. In fact, New Jersey Courts may impute income to the payor up to the amount the payor earned at his/her prior employment.

In Mowery, the Court held it is not merely the present earnings of the payor, but the potential earning capacity that is the essence of this factor. Mowery v. Mowery, 38 N.J. Super. 92 102 (App. Div. 1955).

“Inherent in a finding of “underemployment” is the notion the obligor is intentionally failing to earn that which he or she is capable of earning…if the Court finds that either parent is, without just cause, voluntarily underemployed or unemployed, it shall impute income to that parent…” Dorfman v. Dorfman, 315 N.J. Super. 511, 516 (App. Div. 1998).

In determining whether a parent has just cause to be voluntarily unemployed, for purposes of imputing income to that parent pursuant to child support guidelines, court should consider employment status and earning capacity of that parent had the family remained intact, reason for and intent behind voluntary underemployment or unemployment, the extent other assets are available to pay support, and ages of any children in parent’s household as well as child-care alternatives; factors such as previously announced plans to retire at an early age, health of parties, whether one party would remain out of workforce to care for children, and other similar considerations that the intact family had or would have contemplated should also be considered.